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Good riddance to useless mini-med health insurance plans

Cancellations are good news for low-paid workers

Published: November 06, 2013 12:00 PM

Judith Goss

There’s a new Tumblr called Mycancellation.com that consists of nothing but user-submitted health insurance cancellation notices, presumably to stoke indignation among health reform critics.

A few of the images posted caught my eye because it’s clear the people who put them there have no idea that they have dodged a health insurance bullet. The plans that they are losing are the "mini-meds" offered to low-paid part-time and hourly workers of restaurants, temp agencies, retail stores, and other such businesses.

These plans are in no way, shape, or form real health insurance. I’ve seen some that top out at no more than a few thousand dollars a year. To be clear: That’s NOT the deductible; it’s the most the plan will pay in a year for all your medical care put together.

In an article on junk insurance last year, I included the story of Judy Goss, a woman from Michigan who had one such policy, from a Cigna subsidiary called Starbridge. It covered $3,000 a year in care, and when she was given a breast cancer diagnosis and needed $30,000 in immediate treatment, she had to put it off for three months until she got approved for a high-deductible Medicaid plan (available to her only because she had young children).

These plans never came close to meeting the standards of the new health care law, which required plans to have an annual cap on benefits of no less than two million dollars as of 2013, and to eliminate annual caps completely starting in 2014. The federal government gave more than 1,200 of the plans, covering 3.9 million people, special waivers to continue until the end of 2013, when, at last, their policyholders would have better alternatives.

By definition, these plans have been marketed to people with incomes that are almost certainly low enough to qualify for extremely generous marketplace premium subsidies, and also for cost-sharing subsidies that will lower deductibles to a few hundred dollars at most. Many will discover they can buy comprehensive coverage for not much more than the $65 a month that Judith Goss was paying for her inadequate policy.

But some of them still don’t realize that they’ve been effectively uninsured all this time, which is why they’re angrily putting their notices on Mycancellation.com.

So to the Sears employee losing a Cigna Starbridge plan; the restaurant staff losing coverage from Aetna SRC, another major mini-med underwriter; the hourly employees of a business identified only as “Mathesen” who are also losing Aetna SRC “coverage,” and Willie (last name whited out), who’s losing a Starbridge plan, here’s my advice. Go out and raise a toast to your good luck in staying healthy enough that you never found out what terrible health insurance you had.

Then hop on our free interactive tool, HealthLawHelper.org, to find out what your new options are. And get yourself some real health insurance.

p.s. A special demerit to Cigna, who drafted the letter to Willie on his employer’s behalf. They didn’t even bother to mention that he should investigate replacement coverage on his state’s health care marketplace. To their credit, the other employers did.

Got a question for our health insurance expert? Ask it here. It helps if you include the state you live in.

— Nancy Metcalf

Health reform countdown: We are doing an article a day on the new health care law until Jan. 1, 2014, when it takes full effect. (Read the previous posts in the series.) To get health insurance advice tailored to your situation, use our Health Law Helper, below.